Airlines for America Projects Summer Air Travel to Reach All-Time High

International air travel on U.S. carriers to surpass 2014 record with
31 million travelers

2015 schedules show most summertime seats offered since 2008-2009
recession

May 18, 2015 12:01 AM Eastern Daylight Time

WASHINGTON--(BUSINESS WIRE)--Airlines
for America (A4A), the industry trade organization for the leading U.S.
airlines, today forecast that summer 2015 air travel would rise to
its highest level ever while reporting that U.S. passenger airlines
achieved strong operational performance and improved profitability in
the first quarter despite another harsh winter.

A4A projects approximately 222 million passengers (2.4 million per day)
are expected to fly on U.S. airlines from June 1 – Aug. 31, up 4.5
percent (104,000 passengers per day) from 2014. This includes 31 million
travelers (332,000 per day) on international flights – a record high. To
accommodate the expected growth in demand, airlines are increasing the
number of available seats by 4.6 percent, or 126,000 per day, during
this period.

Published airline schedules show Canada, Mexico, the United Kingdom,
Germany and Japan, respectively, as the top five nonstop international
destinations from the United States. Year over year, airlines are adding
the most seats to the marketplace for flights between the United States
and Mexico, the United Kingdom and China.

“The continued rise in U.S. consumer sentiment and employment is leading
to more people traveling more often, and air travel remains one of the
best consumer bargains in America,” said John
Heimlich, A4A Vice President and Chief Economist. “With 13 of the 15
busiest air travel days of the year falling in the summer months, U.S.
airlines are well-prepared to accommodate the increased travel demand by
adding flights and seats, and deploying new and larger aircraft, along
with a boost in staffing to enhance the customer experience.”

During the first quarter of 2015, 10 publicly traded U.S. passenger
carriers collectively reported a Generally Accepted Accounting
Principles (GAAP) net profit of $3.1 billion, or 8.4 percent, which
improved from 1.1 percent during the same period in 2014. Operating
revenues rose 3.1 percent year over year, due in large part to a 3.9
percent increase in the number of air travelers, which is the equivalent
to an additional 72,400 passengers per day. Wages and benefits rose 10.5
percent, overtaking fuel for the top spot among industry operating
expenses. While the 8.4 percent margin is an improvement over last year,
it leaves the industry shy of the U.S. corporate average of 9.8 percent,
as measured by the Standard & Poor’s (S&P) 500.

Heimlich noted that February 2015 was the 15th consecutive
month of employment gains at U.S. airlines, having added nearly 9,500
jobs over the past five years.

Despite entering 2015 with approximately $66 billion of debt and coping
with another harsh winter, meaningful financial progress enabled
carriers to continue significant levels of reinvestment to further
enhance operational reliability and the customer experience.
First-quarter capital expenditures for the nation’s airlines totaled
$3.6 billion, on track to exceed $14 billion for the full year.
Collectively, these 10 airlines are slated to take delivery of 367 new
aircraft in 2015, or the equivalent of roughly one per day.

“Healthy air-travel demand and lower, yet still volatile, fuel prices
are helping U.S. airlines close the gap to average U.S. corporate
profitability,” said Heimlich. “In the first quarter, airlines invested
more than $20 per passenger in capital improvements, taking care of
employees, continuing to pay down debt and returning cash to
shareholders.”

Operating Revenues and Expenses: Revenues increased 3.1 percent
year over year and total operating expenses declined 6.7 percent, due
in large part to lower fuel costs. Total fuel expenses for the group
fell 32.9 percent. The decline in fuel costs exceeded increases in
labor, airport-related and aircraft costs.

Capital Expenditures (CapEx): U.S. airlines reinvested $3.6
billion in the product and customer experience during the first
quarter. Airline CapEx rose 170 percent from 2010 to 2014; more than
$14 billion of reinvestment is expected in 2015.

1Q 2015 Operational Performance

Customer Service: U.S. passenger airlines’ operational
performance improved markedly year over year as airlines invested in
systems, procedures and staffing operations to cope with the winter
weather. According to the Department of Transportation, first quarter
2014 to first quarter 2015, U.S. carriers improved the rate of
completed flights from 95.4 percent to 96.9 percent. On-time arrival
rate increased from 72.2 percent to 76.3 percent, and the share of
passengers having their bags properly handled rose from 99.56 percent
to 99.61 percent. The rate of involuntary denied boardings fell from
an already low 1.37 per 10,000 customers to 0.85 per 10,000.

ABOUT A4A

Annually, commercial aviation helps drive nearly $1.5 trillion in U.S.
economic activity and more than 11 million U.S. jobs. Airlines for
America (A4A) vigorously advocates on behalf of the American airline
industry as a model of safety, customer service and environmental
responsibility and as the indispensable network that drives our nation’s
economy and global competitiveness. Our member carriers and their
affiliates transport more than 90 percent of all U.S. airline passenger
and cargo traffic.

America needs a cohesive National Airline Policy that will support the
integral role the nation’s airlines play in connecting people and goods
globally, spur the nation’s economic growth and create more high-paying
jobs. A4A works collaboratively with the airlines, labor groups,
Congress and the Administration to improve air travel for everyone.